Archive for July 31st, 2009

TGIF And Predictions

Friday, July 31st, 2009

These were the items that were most important this week:

*Health care vote put off until September. Gorilla thinks health care reform is dead as a serious issue, and we’ll get some half-assed insurance exchange where a few Americans can but not must buy. This will be disguised as a “co-op” and called a “public option”. Employers will continue off-loading workers, benefits, or both. Obama has blown this one in exactly the same way as he blew the stimulus, by negotiating with himself and letting the opposition define every aspect of the “debate”.

*Beers all around. Racism and racial profiling by police departments remain, but that’s not the conversation people want to have about race in their increasingly segregated communities. We want to feel good about how we feel about the other. Gorilla believes we’ve seen the last of the post-racial society.

*The economy is still contracting. GDP was much worse in Q1 than first reported, but not as bad in Q2 as feared (until those numbers are revised). Consumers and businesses are not spending at all; without government spending, the numbers would be far worse. Gorilla believes the economy will not recover for at least another 12 months and that unemployment will be at or above 10% until 2011 or 2012.

*The curious refusal to face reality goes on, from Washington to Kabul and from Cambridge to Wall Street. Americans want lots of things, but don’t want to pay for them. They don’t trust government, except when they need government. They know that things are getting worse, but at a much better rate than they used to. Gorilla isn’t sure which planet is in more trouble: the one with economic, geopolitical, and environmental disasters or the one Americans think they live on.

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Ponzier Than Thou

Friday, July 31st, 2009

This excellent NY Times chart illustrates what a massive fraud AIG was and still is.

The total cost so far to America: $182 billion and climbing. We currently own 85% of this fabulous capital destroying enterprise.

As the accompanying article mentions: “Nothing is wrong with spreading risks to other companies, a practice known as reinsurance, when it is carried out with unrelated, solvent companies. It can also be acceptable in small amounts between related companies. But A.I.G.’s companies have reinsured each other to such a large extent, experts say, that now billions of dollars worth of risks may have ended up at related companies that lack the means to cover them.

“An organization like this one relies on constant, ever-growing premium volume, so it can cover and pay for the deficits,” said W. O. Myrick, a retired chief insurance examiner for Louisiana.”

Truer words that Ponzi might have spoken.

Or, as Gorilla says: “Madoff may be gone, but his memory lives on in the hearts and wallets of the American taxpayer”.

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New Guy, Same Old War

Friday, July 31st, 2009

The latest general in charge of Afghanistan now thinks we need more troops of every kind: American, NATO, and Afghan.

How many? Enough to bring the Afghan army/police up to over 400,000 and the US/NATO contingent to over 100,000.

But there’s a lot of skepticism in DC (and in Europe) about putting in additional troops, starting with the teachable bartender who ran on that platform.

Seems Afghanistan is the central front in the war on terror, but not a place where we actually want to fight, let alone think we can win.

Don’t want to see American girls and boys being killed to preserve the heroin trade, a magnificently corrupt and ineffective government, and a warlordocracy, much less to find a handful of al-Qaeda leaders across the border in Pakistan (why did we go in, again?).

So, it’s drones today and drones forever.

Gorilla says: “The military-industrial complex works for America! Under the new scheme, we’ll finally be matching the Soviets body for body and losing just as well or better!”

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Trading In With A Clunk

Friday, July 31st, 2009

The Cash for Clunkers program is so popular, it’s run out of money. This is a very good thing, but alas our leaders are likely to keep the idiocy going.

So, what’s wrong? Well, all the program does is pay people to do what they would have done anyway, while the mileage standard required of the new car is absurdly low (18mpg or better).

As a result, future auto sales are moved forward to 2009. Come 2010 or 2011, sales will fall back, which is precisely what happened in Germany, the home of this “innovation”.

In the short run, this is a great boon to politicians (no accident the Germans are having an election this year) and auto manufacturers facing the oblivion of a worldwide car glut.

Later on, of course, it makes no difference at all, except to the taxpayers, who are fleeced again.

Gorilla thinks: “We’d be better off taking Max Baucus and his Gang of Six, sending them down to join the canary in the coal mine, and having a Trillion Dollar Health Care Treasure Hunt to find whatever’s left of them. Call it Trash For Spelunkers”.

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